Baldwin and an associate allege that they weren't told that a firm had made a deal to lease oil separators to BP after last year's spill in the Gulf of Mexico. They say they learned after selling their interests that a deal had been struck.

Kevin Costner testifies before the House of Representatives in September… (Mark Wilson, Getty Images )

Actor Stephen Baldwin is locked in a legal battle with fellow actor and director Kevin Costner over a plan to market an oil-spill fighting technology as the Deepwater Horizon crisis started to unfold in the Gulf of Mexico last year.

In a complaint filed in U.S. District Court in New Orleans, Baldwin and a business associate say they were duped into cashing out their shares of Ocean Therapy Solutions, a Louisiana company that leased 32 centrifugal oil separators to BP for an estimated $52 million. Costner helped arrange the deal.

The suit, and interviews with parties involved, cast a different light on Costner's role in promoting what came to be known as the "Costner solution" to the oil spill in the Gulf of Mexico than was portrayed in the months after the accident. At the time, Costner appeared before Congress, imploring the oil industry to deploy a technology he had nurtured for years.

Few but Costner and his partners knew that Costner did not own the company making the centrifuges, and that he was operating as a celebrity salesman.

Last week, Costner's lawyers said he did not own a financial interest in or serve on the board of the company that was formed to promote the technology, and they filed to have the suit dismissed.

And the centrifuges that came to be known as the Costner solution have been dismantled, their parts placed in storage. "We do have six of them in a warehouse, and there are suspicions of more around someplace," BP spokeswoman Hejdi Feick said.

The machines were not deployed in the gulf until late last summer, after most of the oil had been skimmed, dispersed or evaporated at sea. They were all but ignored in an 84-page BP report, published in September, that evaluated the various technologies the firm used to combat the oil spill.

Costner says he invested 15 years and about $24 million in development since he bought the technology, which was originally developed with help from the Department of Energy. The machines are designed to suck up oily water and spin it around at high speeds, separating the contaminants from the water.

Unable to build a customer base, Costner in 2004 sold his centrifuge manufacturing company, CINC Industries Inc., of Reno — an acronym for "Costner in Nevada Corporation" — to Nevada engineer Bret Sheldon.

"Kevin said he didn't want to own CINC anymore and he completely walked away from it," said Sheldon, who markets the technology to chemical, pharmaceutical, food, printing, mining, nuclear and waste-water treatment industries. "The big oil companies don't want to spend millions of dollars on a product like this until they absolutely have to."

The lawsuit and interviews reveal that Ocean Therapy Solutions was formed a few days after the April 20, 2010, explosion on the oil rig, under an agreement that gave it exclusive rights to market CINC machines to BP. It also gave Baldwin and Spyridon Contogouris 10% and 28% interest, respectively, in OTS.

In May 2010, Costner emerged as a spokesman for OTS, focusing international attention on the devices' ability to separate oil and water. On June 8, the day before Costner was scheduled to testify before Congress on the effectiveness of the technology, BP signed a letter of intent to lease 32 CINC machines, according to court documents.

Initial tests conducted in southeastern Louisiana's Port Fourchon in front of BP and government officials produced mixed results.

"We tried the centrifuges out on emulsified oil the consistency of peanut butter," Sheldon recalled. "It gummed up everything. The oil wouldn't even drain out of 3-inch hoses. So we put four centrifuges on a barge in the vicinity of the Deepwater Horizon site. Out there, we got ideal results."

Baldwin and Contogouris allege that they were excluded from a meeting of BP officials, OTS officers and Costner, which allegedly resulted in an $18-million deposit on an order for 32 centrifuges. The sale generated an estimated profit of $38 million, according to documents filed by Baldwin.

Baldwin and Contogouris later sold their interests in OTS for $500,000 and $1.4 million, respectively, after an OTS officer told them that "BP had not in fact placed an order for the separators," the suit alleges. The two allege that they would not have sold their OTS shares if they had known that BP had agreed to lease the machines.

Costner, through his Louisiana attorney, Wayne Lee, declined comment on the lawsuit or the technology.

In a brief interview, Baldwin said, "Mr. Costner represented something one way when the facts were different. It was a revelation that led me to file the lawsuit."

"Research is going on to figure out exactly how the whole thing transpired," Baldwin said. "Myself and my partner are only seeking what is legitimately owed to us."

In the meantime, Costner and OTS officers continue to promote the technology, which thus far has shown the most promise in waste-water treatment. "Every time I look up, it seems Kevin and his folks are someplace else in the world trying to market our machines," Sheldon said with a smile. "They are working real hard, and I appreciate that. After all, he's got the name. I'm just a little guy in Nevada."

"It'd be nice if they were to become successful in their endeavors," he said, "but that's not the only application on our plate."